Solution Manual
Strategy An Introduction To Game Theory
By Joel Watson
3rd Edition
, Contents
I General Materials 7
Ii Chapter-Specific Materials 12
1 Introduction 13
2 The Extensive Form 15
3 Strategies And The Normal Form 18
4 Beliefs, Mixed Strategies,
And Expected Payoffs 21
5 General Assumptions And Methodology 23
6 Dominance And Best Response 24
7 Rationalizability And Iterated Dominance 27
8 Location, Partnership, And Social Unrest 29
9 Nash Equilibrium 32
10 Oligopoly, Tariffs, Crime, And Voting 34
11 Mixed-Strategy Nash Equilibrium 35
12 Strictly Competitive Games
And Security Strategies 37
13 Contract, Law, And Enforcement
In Static Settings 38
14 Details Of The Extensive Form 41
15 Sequential Rationality
And Subgame Perfection 43
16 Topics In Industrial Organization 45
17 Parlor Games 46
3
Instructor's Manual for Strategy: Copyright 2002, 2008, 2010, 2013 by Joel Watson.
An Introduction to Game Theory For instructors only; do not distribute.
,CONTENTS 4
18 Bargaining Problems 48
19 Analysis Of Simple Bargaining Games 50
20 Games With Joint Decisions;
Negotiation Equilibrium 52
21 Unverifiable Investment, Hold Up,
Options, And Ownership 54
22 Repeated Games And Reputation 56
23 Collusion, Trade Agreements,
And Goodwill 58
24 Random Events And
Incomplete Information 60
25 Risk And Incentives In Contracting 63
26 Bayesian Nash Equilibrium
And Rationalizability 65
27 Lemons, Auctions,
And Information Aggregation 66
28 Perfect Bayesian Equilibrium 68
29 Job-Market Signaling And Reputation 70
30 Appendices 71
Iii Solutions To The Exercises 72
2 The Extensive Form 73
3 Strategies And The Normal Form 76
4 Beliefs, Mixed Strategies,
And Expected Payoffs 79
6 Dominance And Best Response 80
7 Rationalizability And Iterated Dominance 81
, CONTENTS 5
8 Location, Partnership, And Social Unrest 83
9 Nash Equilibrium 86
10 Oligopoly, Tariffs, Crime, And Voting 89
11 Mixed-Strategy Nash Equilibrium 95
12 Strictly Competitive Games
And Security Strategies 102
13 Contract, Law, And Enforcement
In Static Settings 103
14 Details Of The Extensive Form 108
15 Sequential Rationality
And Subgame Perfection 110
16 Topics In Industrial Organization 114
17 Parlor Games 117
18 Bargaining Problems 119
19 Analysis Of Simple Bargaining Games 121
20 Games With Joint Decisions;
Negotiation Equilibrium 123
21 Unverifiable Investment, Hold Up,
Options, And Ownership 127
22 Repeated Games And Reputation 131
23 Collusion, Trade Agreements,
And Goodwill 135
24 Random Events And
Incomplete Information 138
25 Risk And Incentives In Contracting 140
26 Bayesian Nash Equilibrium
And Rationalizability 142
Strategy An Introduction To Game Theory
By Joel Watson
3rd Edition
, Contents
I General Materials 7
Ii Chapter-Specific Materials 12
1 Introduction 13
2 The Extensive Form 15
3 Strategies And The Normal Form 18
4 Beliefs, Mixed Strategies,
And Expected Payoffs 21
5 General Assumptions And Methodology 23
6 Dominance And Best Response 24
7 Rationalizability And Iterated Dominance 27
8 Location, Partnership, And Social Unrest 29
9 Nash Equilibrium 32
10 Oligopoly, Tariffs, Crime, And Voting 34
11 Mixed-Strategy Nash Equilibrium 35
12 Strictly Competitive Games
And Security Strategies 37
13 Contract, Law, And Enforcement
In Static Settings 38
14 Details Of The Extensive Form 41
15 Sequential Rationality
And Subgame Perfection 43
16 Topics In Industrial Organization 45
17 Parlor Games 46
3
Instructor's Manual for Strategy: Copyright 2002, 2008, 2010, 2013 by Joel Watson.
An Introduction to Game Theory For instructors only; do not distribute.
,CONTENTS 4
18 Bargaining Problems 48
19 Analysis Of Simple Bargaining Games 50
20 Games With Joint Decisions;
Negotiation Equilibrium 52
21 Unverifiable Investment, Hold Up,
Options, And Ownership 54
22 Repeated Games And Reputation 56
23 Collusion, Trade Agreements,
And Goodwill 58
24 Random Events And
Incomplete Information 60
25 Risk And Incentives In Contracting 63
26 Bayesian Nash Equilibrium
And Rationalizability 65
27 Lemons, Auctions,
And Information Aggregation 66
28 Perfect Bayesian Equilibrium 68
29 Job-Market Signaling And Reputation 70
30 Appendices 71
Iii Solutions To The Exercises 72
2 The Extensive Form 73
3 Strategies And The Normal Form 76
4 Beliefs, Mixed Strategies,
And Expected Payoffs 79
6 Dominance And Best Response 80
7 Rationalizability And Iterated Dominance 81
, CONTENTS 5
8 Location, Partnership, And Social Unrest 83
9 Nash Equilibrium 86
10 Oligopoly, Tariffs, Crime, And Voting 89
11 Mixed-Strategy Nash Equilibrium 95
12 Strictly Competitive Games
And Security Strategies 102
13 Contract, Law, And Enforcement
In Static Settings 103
14 Details Of The Extensive Form 108
15 Sequential Rationality
And Subgame Perfection 110
16 Topics In Industrial Organization 114
17 Parlor Games 117
18 Bargaining Problems 119
19 Analysis Of Simple Bargaining Games 121
20 Games With Joint Decisions;
Negotiation Equilibrium 123
21 Unverifiable Investment, Hold Up,
Options, And Ownership 127
22 Repeated Games And Reputation 131
23 Collusion, Trade Agreements,
And Goodwill 135
24 Random Events And
Incomplete Information 138
25 Risk And Incentives In Contracting 140
26 Bayesian Nash Equilibrium
And Rationalizability 142
